Overall, the September FOMC minutes are not dovish, but one can definitely find some less hawkish lines like "wage-price spiral had not yet developed" and "it would become appropriate at some point to slow the pace of policy rate increases" and "Several participants observed that as policy moved into restrictive territory, risks would become more two-sided".
But, at the end of the day, data will determine the pace for the next two meetings. Pricing for the next two meetings is 72.9bp and 58.3bp, respectively (was 72.2bp and 59.1 before), and is relatively stable compared with the belly and back end of the curve. The price action there is more like a "buy the news, sell the fact" type of move to me, rather than any significant change in the Fed's attitude.
- UBS Strategy
Comments